International

Another April 15 has come and gone and if, like many Americans, you are still feeling bitter about the bite the taxman took out of your wallet, it’s still safe to indulge in a little fantasizing about skipping off to a tax haven like the Cayman Islands.

India may become a victim of its own success as a center for outsourcing.As U.S. companies continue to rush business offshore, the competition for labor is getting fierce — so fierce that a typical business-processing center can expect to lose 15 to 20 percent of their workforce every year, the New York Times reported.

Tax Commissioners of Australia, Canada, the United Kingdom and the United States have now established a joint task force to increase collaboration and coordinate information about abusive tax transactions by signing a Memorandum of Understanding (inserted below) in Williamsburg, Virginia on April 23, 2004.An initial focus of the work will include the ways in which financial products are used in abusive tax transactions by corporations and individuals to reduce their tax liabilities, and the identification of promoters developing and marketing those products and arrangements.The joint tas

As outsourcing accelerates, it can be the best of times or the worst of times for U.S. small businesses.Take for example Craig Schroer, president of Unitech, a tool and die manufacturer in Lee's Summit, Mo. His company’s revenues were slashed in half almost overnight when his biggest customer, a U.S. truckmaker, decided to purchase cheaper parts from a Chinese manufacturer. "One month they were talking to us about doubling their orders," said Schroer, who until recently employed 16 workers and enjoyed annual sales of $2 million.

Grant Thornton has taken a dramatic step to disassociate itself from its former audit client, Global Crossing, saying it can no longer be involved with the telecommunications company’s financial statements, The Street.com reported.According to a federal filing yesterday, Grant Thornton took the unusual move of withdrawing its Global Crossing audit reports for the last three quarters.

A study conducted by KPMG has revealed some interesting information about the typical perpetrator of a fraud, why they steal and who they target. Seventy-two percent of cases involve men only. Over half of company fraud involves two to five people. Forty percent of fraud involves employees from the finance department.The analysis examines 100 of the fraud cases that KPMG has been called in to investigate over the past two years, from which a profile of a fraudster has been created.

All the talk against foreign outsourcing this political season has not translated into action by U.S. executives, who plan to send 50 percent more work to India next year.According to a study by Ernst & Young, while opposition to outsourcing has intensified in the presidential campaign and among union groups, the flow of work to India has remained constant, the Financial Times of London reported. "The sentiment is very strong.

The chairman of the International Accounting Standards Board says a global set of accounting standards would be good for business.Sir David Tweedie, on a tour of New Zealand promoting a unified accounting rulebook, told the New Zealand Herald that the 15 countries in the European Union have 16 possible ways of accounting. When 10 new countries join next month, the total will be 26.All the countries would enjoy a positive economic spin-off under a single set of standards.

The Treasury Department and the Internal Revenue Service today issued temporary regulations requiring partnerships to allocate foreign taxes in the same manner as they allocate the income to which those taxes relate. These regulations target certain transactions in which U.S. partners (or U.S. shareholders of partners that are controlled foreign corporations) attempt, through special partnership allocations, to claim foreign tax credits that are not matched by income subject to U.S.

Cap Gemini Ernst & Young is using two behind-the-scenes guys to show how its newly named "Capgemini" will boast the same results for your business.The Paris-based consulting and technology services firm will embark on a $60 million advertising campaign featuring Andre Agassi’s coach and David Bowie’s sound engineer as spokesmen. Capgemini faces a May deadline to remove the Ernst & Young portion of its name, as part of its 2000 purchase of E&Y’s consulting arm.

The Securities and Exchange Commission on Tuesday voted to adopt a rule and form amendments designed to provide foreign banks under certain conditions exemption from insider lending prohibitions; to propose for comment new rules regarding shell companies, "reverse mergers" and use of securities registered on Form S-8; and voted to adopt disclosure requirements for investment companies regarding their policies and procedures on market timing, fair valuation and selective portfolio disclosure.Disclosure Regarding Market Timing, Fair Value Pricing, and Selective Disclosure of Portfolio Hold

Making one of the largest foreign investments in India in many years, International Business Machines Corp. announced its plans to buy call-center company Daksh eServices Ltd.Industry executives estimated the purchase price at between $150 million and $200 million, although neither IBM or Daksh would reveal the actual price. The acquisition is expected to be completed in May, the Wall Street Journal reported.Daksh, with $60 million in revenue, is one of India’s biggest call-center companies.

The International Accounting Standards Board (IASB) was expected yesterday to release its final set of rules, which public companies in the European Union and other countries will be required to follow starting next year, the Wall Street Journal reported.The rules come despite a continuing dispute between the IASB and the European Union about how rules governing how banks and insurers account for complex financial instruments, the Journal reported. IASB would require the instruments to be valued at current market prices or fair value on company balance sheets.

The EU and the US have hammered out a deal to address rules for auditing on both sides of the Atlantic.The agreement will require auditors to register in both the US and the EU to work on publicly held companies in the US and EU, with one EU official calling their efforts to compromise as "working in parallel," Eupolitix.com reported."It's a done deal," said William McDonough, chairman of the US Public Company Accounting Oversight Board (PCAOB) after meeting with EU’s internal market commissioner Frits Bolkestein.He added that he was pleased by the European Commission's announcement

In the United States, it’s Enron. In Europe it’s Ahold and Parmalat. The company names are now synonymous with scandal and all three have spurred wide-scale reforms designed to keep it from happening again.Yesterday, the European Commission proposed stricter auditing standards in the fight against the corporate scandals that are now affecting Europe, after blowing up here in 2001 and 2002. The U.S. took steps to reign in the accounting profession in 2002 with passage of the Sarbanes-Oxley Act, which among other things created the Public Company Accounting Oversight Board.The U.S.

The commissioners of the tax administrations of Australia, Canada, the United Kingdom and the United States have begun discussions to form a joint task force to increase collaboration and coordinate information about abusive tax transactions.The tax commissioners share a number of common challenges with respect to abusive tax transactions. While the tax administrations operate primarily within their own borders, many abusive tax transactions employ strategies that cross borders, and many of the promoters of these transactions operate globally without regard to national boundaries.

The U.S. Securities and Exchange Commission today voted to publish for comment proposed amendments to Form 20-F, to adopt additional reporting requirements on Form 8-K and to publish for comment proposed disclosure requirements for portfolio managers of mutual funds and other registered management investment companies.1.

The Public Company Accounting Oversight Board today approved an auditing standard for audits of internal control over financial reporting and proposed amendments to the Board’s existing interim auditing standards to conform them to the new standard. The Board also voted to change the registration deadline for non-U.S. accounting firms from the previous deadline of April 19 to July 19, 2004.